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Issues: Classification of imported cargo as crude or refined palmolein oil, applicability of duty rates, acceptance of test reports by Port Health Officer, relevance of Board Circular No. 85/2003-Cus.
In this judgment by the Appellate Tribunal CESTAT, Bangalore, the appeal was filed by M/s. Ruchi Infrastructure Ltd. against the Order-in-Original passed by the Commissioner of Customs and Central Excise, Visakhapatnam. The main issue revolved around the classification of imported cargo, declared as "Crude Palmolein" of edible grade, for which concessional duty rates were claimed. The importer argued that the cargo was imported as crude palmolein from a specific supplier, emphasizing the importance of distinguishing between refined and crude palmolein based on factors like FFA, Moisture Content, Colour, and Rancidity. The importer also highlighted the necessity of the Port Health Officer's sample testing and certification, which confirmed the material as crude palmolein to be refined before human consumption, in accordance with the PFA Rules. The dispute arose when the Central Revenue Control Laboratory found the sample to be conforming to refined grade specifications, leading to a demand for duty payment by the Commissioner, including interest on the differential duty. However, the importer relied on Circular No. 85/2003-Cus., dated 24-9-2003, issued by the Central Board of Customs, which provided specific definitions for crude palm oil and palmolein for duty assessment purposes. The Circular clarified that if the Port Health Officer's test reports indicated the item as crude palm oil/palmolein needing further processing, the assessment should be finalized accordingly. The Tribunal carefully analyzed the submissions and referred to the Board Circular, noting that the Port Health Officer's test report, stating the sample as crude palmolein to be refined before home consumption, aligned with the Circular's provisions. Consequently, the Tribunal set aside the Commissioner's order, emphasizing the acceptance of the Port Health Officer's report over the Central Revenue Control Laboratory's findings, as per the Circular's guidelines. The judgment highlighted the binding nature of Board Circulars on Revenue Department officers, citing a Supreme Court decision for reference. Overall, the Tribunal's decision centered on the proper classification of the imported cargo, the significance of the Port Health Officer's test report, and the applicability of duty rates based on the definitions provided in the Board Circular, ultimately leading to the appeal being allowed in favor of the importer, M/s. Ruchi Infrastructure Ltd.
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